Scope: Mainland China manufacturing and tooling arrangements
You decide to move production to another factory. The current manufacturer says the mold cannot leave until you place another order or pay disputed charges. Your team points to the original tooling invoice. The factory points to the production agreement.
China tooling ownership disputes often expose a gap between paying for equipment and having a workable right to recover it. Ownership, possession, intellectual property and any claimed right to retain the tooling need separate examination.
Identify the actual tooling and the parties holding it
Build an inventory with photographs, serial numbers, design references, location and payment records. Distinguish the mold from spare parts, fixtures, drawings and production files. Confirm whether your contracting supplier holds it or whether a subcontractor made and stores it.
If the supplier promised to arrange manufacture of the tooling, ask for the relevant delivery and acceptance records. A general charge described as development costs may need interpretation alongside the contract and correspondence.
Read the release provisions before arranging collection
Look for provisions on title, permitted use, storage, maintenance, access, transfer and end-of-contract cooperation. Identify any unpaid production or tooling amounts and whether those amounts are genuinely disputed. Do not assume the right to enter the premises follows automatically from your ownership claim.
China’s Civil Code includes rules on contracts for work. Article 783 addresses retention or refusal to deliver completed work where specified amounts remain unpaid, unless the parties agree otherwise. Whether that provision or another legal basis applies to particular tooling requires analysis of the arrangement and facts. It is not a blanket entitlement for every factory to hold every customer-owned mold. Official Civil Code text.
Separate physical transfer from design rights
Possession of a mold does not answer who may use the underlying drawings, software or protected design. Review licenses, confidentiality terms and restrictions affecting the replacement manufacturer. Identify any technical information needed to operate the tooling safely and reliably.
Ask the receiving factory to specify what it needs before scheduling removal. An undocumented transfer can move the equipment without solving the production problem.
Negotiate a handover that can be checked
A proposed handover record can list the items, condition, pickup arrangements, authorized representatives and outstanding documents. Record how disputed charges will be handled without casually giving up other claims. Consider the effect of any release or settlement wording before signing it.
Facing a tooling release dispute? Ask Jinyuan Law Firm to review the contract and evidence. Start with the tooling schedule, invoices, payment history and the factory’s written explanation. Request an assessment of ownership, retention arguments and a practical route to negotiated transfer or dispute resolution.
Related reading: Your English Contract Looks Clear. Will the China Transaction Work as Intended?.
General information only. Advice depends on the facts and applicable jurisdiction. Contact does not by itself create a lawyer-client relationship. Local-law advice may be needed outside mainland China.
